One aspect of Scott Morrison's personal war on the poor and vulnerable becomes the subject of a legitimate study

“Income management quarantines a portion of social security payments, placing these funds in a special account that can only be used to pay for essentials such as food and bills, and cannot be used to purchase alcohol or tobacco. Compulsory income management was first introduced to Australia - and, indeed, the world - in 2007 as part of the Northern Territory Emergency Response (‘the intervention’), and has been through several incarnations in the decade since. A comparable policy - ‘money management’ - was introduced to New Zealand in 2012.

While numerous government evaluations of income management have been undertaken in Australia, their findings have been inconsistent. Stakeholders and politicians alike have called for a rigorous and independent study of the program to better understand its impacts.

To date, no evaluations - independent or otherwise - have been conducted into money management in New Zealand.

This project therefore represents the first large independent study of compulsory income management in Australia and New Zealand. It investigates how income management has developed as a policy, how it is being implemented by service providers, and how it affects the lives, choices and autonomy of benefit recipients.

A key aim of this study is understand the lived experiences of those who are subject to compulsory income management, and feed these findings back to policymakers.”  [About The Study, February 2020]

University of Queensland, media release, 25 February 2020:

COMPULSORY INCOME MANAGEMENT ‘DISABLING, NOT ENABLING’, STUDY SHOWS

Restricting where and on what social security payments can be spent does more harm than good, according to the first large, independent study into Compulsory Income Management (CIM) policies in Australia.

The University of Queensland’s Professor Greg Marston said the majority of participants using the BasicsCard or Cashless Debit Card reported practical difficulties making purchases and paying bills, which introduced new instability into their lives.

“Income management proponents say it can stabilise recipients’ lives and finances, and our study found some people have experienced these benefits,” Professor Marston said.

“However many more people have faced additional financial challenges because of the policies.

“Many also found their expenses had increased as they were blocked from participating in the cash economy and burdened with new fees and charges.”

The study team said CIM had often been framed as an intervention to strengthen benefit recipients’ independence, build responsibility and help transition people away from “welfare dependency” and into work.

Professor Marston said previous evaluations had raised significant concerns about the capacity of income management policies to meet their stated objectives, yet income management continued to be expanded.

“There have been recent moves to extend the Cashless Debit Card across the Northern Territory, but our findings show that CIM has in fact weakened many participants’ financial capabilities and autonomy,” he said.

“To manage their finances, many participants have become reliant on family members, service providers or automatic payment systems.”

Researcher Dr Michelle Peterie said the study was unique for its focus on individuals’ and communities’ experiences with the Cashless Debit Card and BasicsCard.

“These voices have frequently been lost or ignored in the policy debate,” she said.

Dr Peterie said the research showed a voluntary, opt-in form of income management could have a place, however the social, emotional and economic costs of continuing with a compulsory, widespread system outweighed the benefits.

“The overwhelming finding is that compulsory income management is having a disabling rather than enabling affect on the lives of many social security recipients,” Dr Peterie said.

“This was true across all of our research sites.”

Professor Marston said a policy approach that focused on providing employment and training opportunities and ensuring accessible social services and affordable housing would be a better starting point for creating healthy, economically secure and socially inclusive communities.

The research involved 114 in-depth interviews, conducted at four trial sites (Playford, Shepparton, Ceduna and Hinkler), and a mixed-methods survey of 199 people at income management sites across Australia.

ENDS

Full study can be accessed at https://static1.squarespace.com/static/5bff47d1da02bc49ad4e890b/t/5e54c6934eb2985cbbf830a5/1582614180484/Hidden+Costs+Report+-+FINAL.pdf

Image: The Conversation, 26 February 2020

Scott Morrison and News Corp need fact checking - again!

The Australian Labor Party released its dividend imputation policy in 2018 and began to come under sustained political attack by the Morrison Government and News Corp with claims that there was a $10 billion dollar hole in Labor’s costing of its policy.

On 18 June 2018 the Parliamentary Budget Office issued a media release:

Imputation credits policy costing

Earlier today, comments have been made about the Parliamentary Budget Office (PBO) estimates of the gains to revenue that may flow from the Australian Labor Party’s (ALP’s) policy to make imputation credits non-refundable.

“The PBO brings our best professional judgement to the independent policy costing advice we provide.  We have access to the same data and economic parameters as The Treasury and draw upon similar information in forming our judgements,” Parliamentary Budget Officer Jenny Wilkinson stated today.

“We stand behind the PBO estimates that have been published by the ALP in relation to this policy, noting that all policy costings, no matter who they are prepared by, are subject to uncertainty.”  In its advice, the PBO is explicit about the judgements and uncertainties associated with individual policy costings.

The PBO confirms that it always takes into account current and future policy commitments, as well as behavioural changes, in its policy costings.  In this case, as outlined at the recent Senate Estimates hearings, these included the superannuation changes announced in the 2016–17 Budget and the scheduled company tax cuts.  In addition, the PBO explicitly assumed that there would be significant behavioural changes that would flow from this policy, particularly for trustees of self-managed superannuation funds. 

The PBO was established as an independent institution in 2012 with broad support from the Parliament.  A key rationale for the formation of the PBO was to develop a more level playing field, by providing independent and unbiased advice to all parliamentarians about the estimated fiscal cost of policy proposals.  The purpose of establishing the PBO was to improve the public’s understanding of, and confidence in, policy costings and enable policy debates to focus on the merits of alternative policy proposals. 

Ten months later on 25 April 2019 News Corp’s The Daily Examiner ran an article on page 8 concerning Labor’s dividend imputation policy which stated:

The independent Parliamentary Budget Office has estimated Labor’s plan would save $7 billion less over a decade than the party expects and that it would affect 840,000 individuals, 210,000 self-managed super funds (SMSFs) plus some bigger funds.

Now the Parliamentary Budget Office publishes the requests for information it receives, including requests for policy implications and costings, however there appears to be no new request for information and costings on Labor’s dividend imputation policy on its website.

Morrison & Co have been caught out misrepresenting the source of their costings before and even flat out lying on occasion, so one has to suspect the veracity of their latest attack on this particular policy.

It's just as likely costings and other figures were done on the back of an envelope by Morrison or Frydenberg.